MONTREAL, May 30, 2014 /CNW Telbec/ - PyroGenesis Canada Inc. (www.pyrogenesis.com) (TSXV: PYR), a TSX Venture 50® company, a world leader in the design,
development, manufacturing and commercialization of advanced plasma
processes, today announced its financial and operational results for
the first quarter of fiscal 2014.
First Quarter Highlights
In 2014-Q1 and PyroGenesis:
2014-Q1 revenues of $806,425 plus backlog of $7,300,000, already exceed
2013 full year revenues by 40%;
Maintain a strong gross margin of 40.1%;
Continues to de-risk the Company by supplying plasma processes to an
expanded client base which includes Oil and Gas and Mining and
Continues to increase business development unit and sale proposals to
PyroGenesis' recent entree into new high-margin market niches is
translating into significant orders for its plasma processes and
engineering services as evidenced by the level of new business
activity. These results validate management's strategic decision to
"de-risk" the Company by introducing its plasma processes into new
high-margin markets. Combined with cost reduction / rationalization
plans undertaken in 2012 management is confident that PyroGenesis is
well positioned for future growth.
Revenues for 2014-Q1 were $806,425 ($1,141,143: 2013); this 29% decrease
in revenues is due to certain customer-originated delays with respect
to the commencement of the deployment of the European 10 TPD Plasma
Waste to Energy system, the continuation of the second phase of Asian
Plasma torch sale, and a postponement in activity relating to the
reorder of a plasma waste destruction system to be installed on CVN-79,
the next US Navy Ford-class air craft carrier.
As of this communication, the second phase of the Asian Torch project
has commenced as has the work relating to CVN-79.
2014 revenues are projected to increase significantly based on a strong
backlog ($7.3MM) at the end of 2014-Q1 combined with the pipeline of
future projects identified and under discussion.
Cost of Sales and Services
Cost of Sales and Services before amortization of intangible assets for
2014-Q1 was $483,141, ($630,583: 2013-Q1), a decrease of 23%. Starting
in 2013, management implemented stringent and effective management
methods with respect to project execution which resulted in more
efficient use of labor. Direct materials procured and installed in the
period decreased by 49% as compared to 2013-Q1. Above reduction to Cost
of Sales and Services are in line with reductions of revenues in the
Building on the improvement in gross margins (before amortization of
intangible assets) started in late 2012, 2014-Q1 posted a strong gross
margin of 40.1% (44.7% :2013-Q1), which, once again, exceeded the
Company's business plan for the period.
The strong level of gross margins in 2014-Q1 was achieved through
controlled project management, tight control over technical resources
employed on projects, and favorable pricing on equipment purchases.
Management is confident that with an increased focus on operations and
project execution, PyroGenesis will continue to post above average
gross margins on its projects notwithstanding the natural fluctuations
that may occur from quarter to quarter.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A") for 2014-Q1 were
$946,918 ($1,002,822: 2013-Q1), a 6% decrease.
2014-Q1 SG&A expenses reflect management's strategic decision to focus
heightened investment in business development and proposals.
Loss from operations and total comprehensive loss for 2014-Q1 increased
22% to $1,164,763 and $1,164,728 respectively, as compared to a loss of
operations and total comprehensive loss of $954,139 reported during
The 22% increase in the comprehensive loss in 2014-Q1 versus the
comparable 2013 period, is primarily due to a reduction in recognized
revenues in the period due to the delays with the commencement and
continuation of previously announced projects. The company continues to
maintain strong control over its spending while increasing resources
allocated to business development, proposals, investor relations and
research and development.
EBITDA (earnings from operations before interest, taxes, depreciation
and amortization) for 2014-Q1 was negative $681,293, an increase of 48%
over the negative EBITDA of $461,322 reported during 2013-Q1.
Through a focused approach of increasing backlog and revenues,
maintaining strong gross margins and controlled spending on SG&A,
achieving break-even EBITDA is expected by year-end.
At March 31, 2014, PyroGenesis had cash on hand of $52,253 and negative
working capital of $2,058,709 (negative $1,373,763 at December 31,
Of note, the Company has no bank debt, nor any debt owing to unrelated
On May 22, 2014, the Company announced that it had completed a brokered,
and concurrent non-brokered, private placement of new equity units for
gross proceeds to the Company of $3,487,419. The net proceeds from the
offerings will be used for general corporate purposes, working capital
and development projects relating to recent business development
Additionally on May 22, 2014, the Company announced that it had entered
into an agreement with its related party creditor, Phoenix Haute
Technology Inc. ("Phoenix"), whereby the Company has requested and
Phoenix has agreed to the Company issuing 7,500,000 common shares at a
deemed price of $0.80 in payment of $6 million owing by the Company to
Phoenix. The completion of this transaction is subject to the final
approval of the TSX Venture Exchange.
2014 is proving to be a tipping point year for PyroGenesis as the full
effects of its strategic plan are being realized.
Revenues-to-date plus backlog already exceed last year's revenues by
more than 40%, and given contracts under discussion Management expects
to increase year over year revenues by more than 100% while maintaining
strong gross margins.
This progress has been largely due to the Company's successful
de-risking of itself in answer to the fiscal crisis confronting its
largest client; the US military. Under the direction of the Board, the
Company has successfully transitioned from being a company
predominately supplying waste management plasma processes to the US
military to one that is supplying plasma processes to not only the
military but also to the Oil and Gas as well as the Mining and
Metallurgical industries. In each case the Company has targeted high
margin niche business with the potential for significant repeat orders.
The recently announced success within the 3D printing industry wherein
PyroGenesis has a proven, and commercially available, technology
platform which can produce the most spherical Titanium powders highly
sought after in 3D printing is just one of the many successes of this
The Company continues to implement measures to strengthen and focus its
business development department, which includes, amongst other
measures, hiring additional strategically focused professionals
The Company continues to de-risk its business model by starting to
require recurring revenue features within sales agreements. Management
has targeted 2016 as the year in which the Company will be profitable
from recurring revenues alone.
In conclusion, Management is confident that the strategic plan adopted
by the Board which has given effect to the realignment and de-risking
of the Company's business, has proved a success and Management expects
that this success will continue and be improved upon into the
About PyroGenesis Canada Inc.
PyroGenesis Canada, a TSX Venture 50® company, is the world leader in
the design, development, manufacturing and commercialization of
advanced plasma processes. We provide engineering and manufacturing
expertise, cutting-edge contract research, as well as turnkey process
equipment packages to the defense, metallurgical, mining, advanced
materials, oil & gas, and environmental industries. With a team of
experienced PyroClassTM engineers, scientists and technicians working
out of our Montreal office and our 3,800 m2 production facility,
PyroGenesis maintains its competitive advantage by remaining at the
forefront of technology development and commercialization. Our core
competencies allow PyroGenesis to lead the way in providing innovative
plasma torches, plasma waste processes, high-temperature metallurgical
processes, and engineering services to the global marketplace. Our
operations are ISO 9001:2008 certified, and have been since 1997.
PyroGenesis is a publicly-traded Canadian company on the TSX Venture
Exchange (Ticker Symbol PYR.V). For more information, please visit www.pyrogenesis.com
This press release contains certain forward-looking statements,
including, without limitation, statements containing the words "may",
"plan", "will", "estimate", "continue", "anticipate", "intend",
"expect", "in the process" and other similar expressions which
constitute "forward-looking information" within the meaning of
applicable securities laws. Forward-looking statements reflect the
Company's current expectation and assumptions, and are subject to a
number of risks and uncertainties that could cause actual results to
differ materially from those anticipated. These forward-looking
statements involve risks and uncertainties including, but not limited
to, our expectations regarding the acceptance of our products by the
market, our strategy to develop new products and enhance the
capabilities of existing products, our strategy with respect to
research and development, the impact of competitive products and
pricing, new product development, and uncertainties related to the
regulatory approval process. Such statements reflect the current views
of the Company with respect to future events and are subject to certain
risks and uncertainties and other risks detailed from time-to-time in
the Company's ongoing filings with the securities regulatory
authorities, which filings can be found at www.sedar.com. Actual results, events, and performance may differ materially. Readers
are cautioned not to place undue reliance on these forward-looking
statements. The Company undertakes no obligation to publicly update or
revise any forward-looking statements either as a result of new
information, future events or otherwise, except as required by
applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE: PyroGenesis Canada Inc.
For further information:
PyroGenesis Canada Inc.
P. Peter Pascali
Chief Executive Officer